While a large body of research has argued that substance use is subject to significant peer influence, there is little empirical literature on the mechanisms underlying such effects. This application proposes analyzing the relationship between an adolescent's popularity at school and alcohol use as a means of improving the understanding of peer influence in adolescents' decisions to use alcohol. The availability of the National Longitudinal Study of Adolescent Health (Add-Health), a rich, nationally representative data set makes possible the identification of social networks at school as well as the construction of indicators of popularity or social status within the network. The association between popularity and alcohol use is analyzed in this study from two perspectives. First, popularity is considered an outcome that adolescents pursue. The claim is that adolescents use alcohol to gain popularity or social status. An analysis from this perspective sheds light on the relevance of theories of social identity or endogenous preference formation in explaining peer influence. In a second approach, popularity is seen as a structural feature of the individual's network that reflects how the adolescent is positioned socially relative to others. Individuals located in more central positions are more likely to feel pressured to comply with group norms and are also more likely to learn from others about the payoffs from drinking. The study of the association between popularity and alcohol use from this perspective improves our understanding of the strength of the mechanisms of behavioral diffusion among adolescents, and enables the estimation of social multiplier effects. The proposed two-year study will address the following specific aims: 1. Analyze the role of alcohol use as a means of gaining social status among adolescents. Provide evidence for or against theories of peer influence based on endogenous preference formation. 2. Evaluate whether social status or popularity increases an adolescent's exposure to peer influence. 3. Study whether an adolescent's price elasticity of demand for alcohol increases with popularity. Use the popularity construct to estimate a social multiplier of alcohol prices. The proposed study will contribute to the understanding of the etiology of alcohol consumption in several ways. First, it will directly estimate the social payoffs from engaging in alcohol consumption. As yet, few studies have examined the social benefits that adolescents derive from drinking, such as social facilitation and popularity. Second, it will shed light on the mechanisms underlying peer influence. Understanding the nature of these mechanisms is important for the design and implementation of prevention programs. For instance, interventions that rely on the provision of information to adolescents may be ineffective if social identity reasons are behind peer influence. Third, it will extend prior literature dealing with popularity and smoking to the alcohol field. Finally, the proposed research will provide an estimate of a social multiplier of alcohol prices that will shed light on the ability of economic policy to prevent and control alcohol use among adolescents. [unreadable] [unreadable] [unreadable]